Summary of Consolidated Financial Statements for the Nine Months Ended December 31, 2017

Transcription

1 February 6, 2018 Summary of Consolidated Financial Statements for the Nine Months Ended December 31, 2017 [Prepared under Japanese GAAP, UNAUDITED] NISSIN FOODS HOLDINGS CO., LTD. Stock code: 2897 Stock exchange listing: Tokyo URL: Phone: Representative: Koki Ando, Representative Director, President and CEO Contact: Yukio Yokoyama, Director, CFO, and Managing Executive Officer Scheduled date of filing of quarterly report: February 6, 2018 (Japanese only) Scheduled date of dividend payment: - Preparation of supplementary documents: Yes Holding of financial results meeting: Yes (Conference call for institutional investors and analysts) (Japanese only) (All amounts are rounded down to the nearest million yen) 1. Consolidated Financial Results for the the (April 1, 2017 December 31, 2017) (1) Operating Results (% figures represent year-on-year changes) Net sales Operating income Ordinary income Net income attributable to owners of parent (%) (%) (%) (%) 386, , , , , , , , Note: Comprehensive income: 3Q of : 31,685million (up 581.5%); 3Q of : 4,649 million (down 82.9%) Net income attributable to owners of parent per share (primary) Net income attributable to owners of parent per share (diluted) ( ) ( ) (2) Financial Position Total assets Total equity Ratio of equity attributable to owners of parent to total assets As of (%) December 31, , , March 31, , , Reference: Equity attributable to owners of parent as of Dec. 31, 2017: 364,839 million, as of Mar. 31, 2017: 341,057 million 2. Details of Dividends Cash dividend per share End of the End of the End of the 1 st quarter 2 nd quarter 3 rd quarter Year-end Total ( ) ( ) ( ) ( ) ( ) (Fct.) Note: Modifications to the dividend forecast published most recently: None 3. Forecasts of Consolidated Results for the (April 1, 2017 March 31, 2018) (% figures represent changes from the previous fiscal year) Net sales Operating income Ordinary income Net income Net income attributable to attributable to owners of owners of parent parent per share (%) (%) (%) (%) ( ) 520, , , , Note: Modifications to the forecast published most recently: None - 1 -

2 Notes : (1) Changes in principal subsidiaries during the nine months of (changes in specified subsidiaries that resulted in changes in scope of consolidation): None -Newly consolidated: None -Excluded from consolidation: None (2) Application of special accounting methods for quarterly consolidated financial statements: Yes Note: Refer to Application of special accounting methods for quarterly consolidated financial statements on page 8 of this material for further information. (3) Changes in significant accounting policy, procedure and presentation methods for consolidated financial statements: 1) Changes due to revisions of accounting standards: None 2) Changes other than 1): None 3) Changes in accounting estimates: None 4) Retrospective restatement: None (4) Number of shares outstanding (common stock) 1) Number of shares outstanding (including treasury stock) as of the end of: Nine months of 117,463,685shares 117,463,685 shares 2) Number of shares of treasury stock outstanding as of the end of: Nine months of 13,329,649 shares 13,373,235 shares 3) Average number of shares outstanding during the period of: Nine months of 104,117,898 shares Nine months of 107,221,848 shares * This Summary of Consolidated Financial Statements is not subject to the audit process. * Notes for proper use of forecasts and other remarks Disclaimer regarding appropriate use of forecasts: Forecasts contain forward-looking statements based on estimates made as of the day of release of these materials. Actual results may differ materially depending on a number of factors including but not limited to potential risks and uncertainties. Please refer to page 4 for (3) Explanation Concerning Consolidated Forecasts

3 Qualitative Information Concerning Nine Months Results (1) Qualitative Information Concerning Consolidated Business Results During the nine months under review, the global economy generally recovered, although there was concern about uncertainties regarding policy operations in the United States and the growing geopolitical risk. In Western countries, economies showed signs of a pick up in consumer spending, reflecting a rise in stock prices as well as continued improvements in the employment and income situations. In Asia, the economy was on a recovery trend overall on the back of solid internal and external demand in emerging economies. In Japan, the economy continued to show a moderate recovery, given signs of a rebound in capital spending as corporate earnings remained strong. Under this environment, based on the Medium-Term Management Plan 2021, of which term covers five years from the fiscal year ending March 31, 2017, to realize the improvements of Earning power through operations and Value in capital markets, we are working on the strategic themes such as 1) Promoting global branding, 2) Focusing on priority overseas locations, 3) Laying stronger foundations for our domestic profit base, 4) Establishing a second pillar that generates revenue and profit, 5) Developing and strengthening human resources for global management. The following is an overview of consolidated results: Consolidated results Year on year Amount % Net sales 369, , , Operating income 21,718 26, , Ordinary income 25,323 32, , Net income attributable to owners of parent 19,893 23, , The following is an overview of performance by reportable segment: Net sales by reportable segment Net sales Year on year Amount % NISSIN FOOD PRODUCTS 171, , , MYOJO FOODS 30,618 30, Chilled and frozen foods 46,557 48, , The Americas 43,226 47, , China 26,072 31, , Other* 1 51,372 53, , Total 369, , , Segment operating income by reportable segment Segment operating income or loss Year on year Amount % NISSIN FOOD PRODUCTS 21,158 22, , MYOJO FOODS 1,097 1, Chilled and frozen foods 1,757 1, The Americas 1,057 1, China 2,151 2, Other *1 2,901 1,560-1, Total 30,122 31, , Reconciliations (8,403) (4,536) + 3,867 - Consolidated 21,718 26, , *1: Other includes business segments not included in reportable segments such as domestic confectionary, domestic beverages, Europe and Asia

4 (i) NISSIN FOOD PRODUCTS The sales of NISSIN FOOD PRODUCTS Co., Ltd. increased year on year with a rise in sales of cup-type noodles and instant rice products, despite the effects of the weak market for bag-type noodle products. In cup-type noodles, sales of the CUP NOODLE series remained steady, including CUP NOODLE NICE, a product line featuring a rich soup that was launched in April 2017, distinguished by 50% less fat, 40% less carbohydrates, and only 178 kilocalories. The NISSIN MENSHOKUNIN series, which was renewed in August 2017, also remained strong. In bag-type noodle products, the OWAN series, which was released in September 2017 featuring the concept of noodle soup in the amount of one Owan bowl volume suitable to serve as an extra side dish!, contributed to an increase in sales. In the category of instant rice products, sales of CURRY MESHI continued to do well. Meanwhile, the enhanced lineup of products that need only hot water to cook them, such as the BUKKOMI MESHI series and the NIHON MESHI series, contributed to the sales growth. (ii) MYOJO FOODS Looking at sales of MYOJO FOODS Co., Ltd, the Myojo Charumera series of bag-type noodles continue to post year-onyear growth in sales. In cup-type noodles, the Myojo Bubuka series and the Myojo Charumera Cup series remained strong. In addition, sales of the Myojo Ippeichan Yomise-no-Yakisoba series showed signs of recovery. As a result, sales of instant noodles as a whole increased year on year. (iii) Chilled and frozen foods At NISSIN CHILLED FOODS Co., Ltd., sales of ramen products remained steady, mainly due to the effects of the renewal of Ramenya-san, a core brand. However, sales declined overall year on year, reflecting the effects of a decrease in sales of fried noodle products due to sluggish demand and challenging market conditions. NISSIN FROZEN FOODS Co., Ltd. saw steady sales, mainly led by pasta and ramen products with precooked ingredients. In pasta products, profit rose as the Reito NISSIN Mochitto Nama Pasta series, including Creamy Bolognese with minced beef and maitake mushroom, continued to post strong sales. As for ramen products with precooked ingredients, products such as Reito NISSIN Chuka Shirunashi Tan Tan Men and Reito NISSIN GooTa Lajao Tan Tan Men remained solid, registering an increase in sales. (iv) The Americas The Americas is working on creating value-added markets as well as empowering existing products to become less susceptible to the effects of price competition. In this situation, it had renewed CUP NOODLES in the U.S. and Brazil in September In addition, the release of high quality CUP NOODLES in the United States contributed to an increase in sales, and consequently, overall segment sales for the Americas grew. (v) China In China, the instant noodle market has bottomed out in mainland China, and the market for high-end products is expanding. In this environment, the Group worked to expand its geographical sales area (the north, northeast, and southwest areas) and strengthen CUP NOODLES in China. Meanwhile, the Demae Iccho remained strong in both the Hong Kong area and mainland China. In addition, MC Marketing & Sales (Hong Kong) Limited, which became a consolidated subsidiary in the fourth quarter of the previous fiscal year, contributed to the increase in sales. (2) Analysis of Financial Position Note: Refer to pages from 5 to 6 for further information. (3) Explanation Concerning Consolidated Forecasts The full-year forecasts of the consolidated financial results for the fiscal year ending March 2018 remain unchanged from the forecasts that were announced on May 12, Any necessary revision of the performance forecasts will be announced promptly in the future

5 Consolidated Financial Statements 1. Consolidated Balance Sheets As of March 31, 2017 As of December 31, 2017 Assets Current assets Cash and deposits 70,919 60,729 Notes and accounts receivable-trade 65,290 77,606 Marketable securities 1, Finished goods and merchandise 12,697 14,244 Raw materials and supplies 16,209 16,495 Others 11,999 16,130 Less: Allowance for doubtful receivables (385) (393) Total current assets 177, ,465 Fixed assets Tangible fixed assets Building and structures, net 60,936 65,754 Machinery, equipment and vehicles, net 50,689 59,169 Land 52,748 52,965 Others, net 23,639 39,574 Total tangible fixed assets 188, ,463 Intangible fixed assets Goodwill 30,464 28,163 Others 13,606 12,138 Total intangible fixed assets 44,070 40,302 Investments and other assets Investments in securities 120, ,284 Net defined benefit asset Others 6,868 6,199 Less: Allowance for doubtful accounts (132) (177) Total investments and other assets 127, ,668 Total fixed assets 359, ,434 Total assets 537, ,

6 As of March 31, 2017 As of December 31, 2017 Liabilities Current liabilities Notes and accounts payable-trade 51,705 60,474 Short-term borrowings 18,450 13,041 Accrued payables 32,961 36,315 Accrued income taxes 7,926 5,242 Others 24,804 25,644 Total current liabilities 135, ,717 Long-term liabilities Long-term debt 15,867 15,666 Liability for retirement benefits 7,346 7,192 Others 24,601 28,438 Total long-term liabilities 47,815 51,298 Total liabilities 183, ,015 Equity Shareholders equity Common stock 25,122 25,122 Capital surplus 49,823 51,233 Retained earnings 308, ,627 Less: Treasury stock, at cost (58,190) (58,003) Total shareholders equity 324, ,980 Accumulated other comprehensive income Unrealized gain (loss) on available-for-sale securities 23,794 32,114 Deferred gain (loss) on hedges - 1 Land revaluation reserve (6,382) (6,382) Foreign currency translation adjustments (1,403) (1,907) Accumulated adjustment for retirement benefits plans Total accumulated other comprehensive income 16,227 23,859 Stock acquisition rights 1,626 1,822 Non-controlling interests 10,833 24,221 Total equity 353, ,883 Total liabilities and equity 537, ,

7 2. Consolidated Statements of Income and Comprehensive Income (Consolidated Statements of Income) Nine months ended December 31, 2016 Nine months ended December 31, 2017 Net sales 369, ,743 Cost of sales 201, ,599 Gross profit 168, ,144 Selling, general and administrative expenses 146, ,247 Operating income 21,718 26,897 Non-operating income Interest income Dividend income 1,353 1,326 Gain on sales of marketable securities 1, Equity in earnings of affiliates 1,178 1,963 Others 609 1,097 Total non-operating income 5,107 6,170 Non-operating expenses Interest expense Foreign exchange loss Commision fee Others Total non-operating expenses 1,501 1,029 Ordinary income 25,323 32,038 Extraordinary gains Gain on sales of fixed assets Gain on sales of investments in securities 6,828 1,093 Insurance proceeds Others Total extraordinary gains 7,274 2,319 Extraordinary losses Loss on sales of fixed assets Loss on disposal of fixed assets Impairment loss Loss due to a fire Loss on valuation of investment securities Loss on valuation of stocks of subsidiaries and affiliates Settlement payout due to contract change Loss on closing factory Others Total extraordinary losses 2,973 1,477 Income before income taxes 29,625 32,880 Total income taxes 9,567 9,012 Net income 20,057 23,867 Net income attributable to non-controlling interests Net income attributable to owners of parent 19,893 23,

8 (Consolidated Statements of Comprehensive Income) Nine months ended December 31, 2016 Nine months ended December 31, 2017 Net income 20,057 23,867 Other comprehensive income Unrealized gain (loss) on available-for-sale securities (18,982) 8,189 Deferred gain (loss) on hedges Land revaluation reserve (56) - Foreign currency translation adjustments 3,280 (461) Adjustments of retirement benefit plans 2,371 (212) Share of other comprehensive income (loss) of entities accounted for by the equity method (2,283) 300 Total other comprehensive income (loss) (15,408) 7,817 Comprehensive income (loss) 4,649 31,685 Total comprehensive income (loss) attributable to: Owners of parent 4,665 31,475 Non-controlling interests (16) Notes to Consolidated Quarterly Financial Statements (Going concern assumption) There was no applicable factor. (Notes on material changes in shareholders equity s state) NISSIN FOODS COMPANY Limited, a subsidiary of the Company in charge of overall control of China business (including those conducted in Hong Kong area), was listed on the Main Board of the Stock Exchange of Hong Kong Limited on December 11, 2017, and issued new shares. As a result, the capital surplus increased 1,410 million during the nine months under review and stood at 51,233 million at the end of the third quarter of the consolidated fiscal year under review. (Application of special accounting methods for quarterly consolidated financial statements) Tax expense for the third quarter under review was calculated by multiplying quarterly income before income taxes by reasonably-estimated effective tax rate after reflecting deferred tax accounting for income before income taxes of the consolidated fiscal year including the third quarter under review. (Additional information) (Changes to matters related to the fiscal year end regarding consolidated subsidiaries) When preparing its consolidated financial statements, the Company has traditionally followed its policy of using final or provisional financial statements prepared as of December 31 for seven consolidated subsidiaries including NISSIN FOODS ASIA PTE. LTD., making the necessary adjustments regarding important transactions conducted between the Company s consolidated fiscal year-end and their fiscal year-end. Effective from the first quarter under review, the Company has either changed the fiscal year-end to March 31 or adopted a new policy to undertake provisional account settlement on March 31 for those seven consolidated subsidiaries in order to ensure more appropriate disclosure regarding the consolidated financial statements. Changes in profit or loss arising from the change implemented to the fiscal year-end during the period from January 1, 2017 to March 31, 2017 have been adjusted as part of the change in retained earnings

9 Segment Information 1. Net sales and income or loss by reportable segment: Nine months ended December 31, 2016 Net sales NISSIN FOOD PRODUCT S MYOJO FOODS Chilled and frozen foods The Americas China Subtotal Others *1 Total Reconciliations *2 Consolidated *3 Sales to third party 171,990 30,618 46,557 43,226 26, ,465 51, , ,838 Intersegment sales 690 4,575 1, ,798 21,006 27,804 (27,804) - Total 172,681 35,194 47,883 43,228 26, ,263 72, ,642 (27,804) 369,838 Segment income (loss) 21,158 1,097 1,757 1,057 2,151 27,221 2,901 30,122 (8,403) 21,718 (Notes) *1. Others consists of the operating segments not included in reportable segments. It includes domestic confectionary and beverages business, and overseas businesses in Europe and Asia. *2. Operating income under Reconciliations amounted to minus 8,403 million, consisting of minus 3,274 million from retirement benefit expenses, minus 1,407 million from the amortization of goodwill, minus 225 million from elimination of intersegment transactions and minus 3,496 million from group expenses. *3. Segment income is reconciled to operating income in the quarterly consolidated statement of income. Nine months ended December 31, 2017 Net sales NISSIN FOOD PRODUCT S MYOJO FOODS Chilled and frozen foods The Americas China Subtotal Others *1 Total Reconciliations *2 Consolidated *3 Sales to third party 175,644 30,884 48,298 47,110 31, ,509 53, , ,743 Intersegment sales 735 4,229 1, ,494 21,183 27,677 (27,677) - Total 176,380 35,114 49,563 47,114 31, ,003 74, ,421 (27,677) 386,743 Segment income (loss) 22,311 1,781 1,784 1,701 2,293 29,873 1,560 31,433 (4,536) 26,897 (Notes) *1. Others consists of the operating segments not included in reportable segments. It includes domestic confectionary and beverages business, and overseas businesses in Europe and Asia. *2. Operating income under Reconciliations amounted to minus 4,536 million, consisting of 462 million from retirement benefit expenses, minus 1,268 million from the amortization of goodwill, minus 230 million from elimination of intersegment transactions and minus 3,499 million from group expenses. *3. Segment income is reconciled to operating income in the quarterly consolidated statement of income. 2. Asset by Reportable Segment NISSIN FOODS COMPANY Limited, a subsidiary of the Company in charge of overall control of China businesses (including those conducted in Hong Kong area), was listed on the Main Board of the Stock Exchange of Hong Kong Limited and issued new shares in the third quarter of the consolidated fiscal year under review. As a result, assets in the China segment increased 13,354 million from the end of the previous consolidated fiscal year